Through this decision, the Council authorises the French territorial communities of Saint-Pierre-et-Miquelon and Mayotte to use the euro and to establish their rights and obligations in relation to the common monetary policy.

ACT

Council Decision 1999/95/EC of 31 December 1998 concerning the monetary arrangements in the French territorial communities of Saint-Pierre-et-Miquelon and Mayotte.

SUMMARY

Saint-Pierre-et-Miquelon and Mayotte are French territorial communities (collectivités territoriales). Their currency is the French franc, and French franc banknotes and coins have legal tender status on their territories. Banknotes and coins are put into circulation by the Institut d'Emission des Départements d'Outre Mer (IEDOM) in both communities (from 1 January 1999 in Mayotte). It also offers refinancing facilities and imposes compulsory reserve requirements.

The two territories do not form part of the Community. Since the Treaty does not specify which monetary regime is applicable to these regions, if no measure is taken, the monetary legislation of the euro area and the other Community provisions relating to Economic and Monetary Union will not apply to these territories. It is therefore necessary for the Council to specify, in a decision addressed to France, the monetary regime which should apply in these French territorial communities.

France must ensure that the same means of payment which have legal tender status in metropolitan France will have legal tender status in Saint-Pierre-et-Miquelon and Mayotte. It must also reform the status and role of the IEDOM, in order to achieve compatibility with the tasks assigned to the European System of Central Banks (ESCB) by the Treaty. France must also ensure the application, in the two territorial communities, of those parts of present and future Community law which are necessary for the functioning of Economic and Monetary Union.

When the European Central Bank (ECB) and the national central banks grant refinancing facilities to financial institutions located in these communities, they follow the rules governing the monetary functions and operations of the ESCB, and the issue of banknotes, as laid down in its Statute. The national central bank responsible for carrying out these activities in the two territorial communities is the Bank of France.